Refer to the graph shown, which depicts a perfectly competitive firm. If the price of the product is $3:
A. the firm may continue to operate in the short run but will exit the industry in the long run.
B. the industry will be in long-run equilibrium.
C. new firms will enter the industry.
D. the firm will just cover its opportunity cost of production.
Answer: A
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Refer to Figure 5-1. At the efficient equilibrium,
A) economic surplus is minimized. B) economic surplus is maximized. C) economic surplus is zero. D) economic surplus is negative.
Assume a baseball player's development in the minor leagues yields -$250,000 per year for four years
If the player were to have a single big league season and be paid $350,000, how much revenue would the player need to generate to be considered a positive net present value project from the point of view of the team owner if the interest rate was 4%? A) $1.45 million B) $2.5 million C) $350,000 D) $250,000